When your house is underwater (worth less than you owe to the bank) and the bank forecloses on your house and sells it for less than you owe, then there is a deficiency — the difference between what you owe and what they received when they sold the property.

Traditionally, the bank has sued the owner for the deficiency after the foreclosure. However, Arizona currently has rules in place that can protect the homeowner from these lawsuits.

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